Entering late August, the domestic fertilizer market exhibited a differentiated pattern: urea prices fluctuated upwards, supported by policy support and export quotas; phosphate fertilizer prices remained stagnant at high levels due to both cost factors and export bans; and potash fertilizer prices continued their downward trend. In the international market, India's latest tender was finalized, and nitrogen fertilizer prices fell significantly from their highs in the first half of the year, indicating continued adjustments in the global fertilizer trade pattern.
The domestic urea market recently bottomed out and rebounded. On the supply side, the industry's daily output was approximately 206,800 tons, with an operating rate of 86.69%, indicating ample overall supply. However, some plants are gradually entering maintenance periods, and daily output will gradually decline in the later period. On the demand side, agricultural demand is in a lull; autumn wheat base fertilizer stockpiling has not yet started on a large scale, and downstream industrial compound fertilizer production is at a low level, with only small-scale purchases for immediate needs.
Regarding exports, my country's total urea export quota for 2026 was 3.3 million tons, of which 2.97 million tons were for state-owned trading and 330,000 tons for non-state-owned trading. The second batch of nearly 2 million tons of quotas issued at the end of May (including 1.5-1.6 million tons of regular quotas and 400,000 tons of G2G special quotas) expires on August 31st. Currently, about 70% of the quotas have been used up, with leading companies having essentially exhausted their quotas. The remaining window of opportunity for market-available quotas is tight. Currently, the domestic urea FOB export price is approximately $360-$420 per ton, with strong demand for orders.
The phosphate fertilizer market remains stagnant at high levels. The mainstream ex-factory price for 55% powdered monoammonium phosphate is 4350-4450 yuan per ton, and the ex-factory price for 64% granular diammonium phosphate in Hubei is 4800-4850 yuan per ton. On the cost side, sulfur port prices remained high above 9100 yuan/ton, and phosphate rock prices were firm, providing strong support. On the demand side, downstream compound fertilizer companies adopted a just-in-time purchasing strategy, with insufficient willingness to lock in large quantities, resulting in sluggish market transactions. It is worth noting that the phosphate fertilizer export ban implemented on March 14th will expire on August 31st. The market generally expects quota-based exports to resume after September, but the quota size is expected to be smaller than in previous years, prioritizing domestic fertilizer demand for autumn planting.
In the international market, the latest RCF tender results for 1.7 million tons of urea in India have been released. The lowest winning bid was $390.25/ton CFR on the east coast and $393.65/ton CFR on the west coast, marking the first time since April 2025 that the price has fallen below the $400 mark, a significant drop of approximately $55 from the June tender price. US nitrogen fertilizer prices also retreated, with urea falling 5% to $678/ton in early August and UAN32 falling 13% to $458/ton.
Looking ahead, domestic urea prices are likely to maintain a slightly upward trend in the short term, supported by export fulfillment, plant maintenance, and policy support. However, the upside potential is limited due to off-season demand constraints. The market is cautious ahead of the expiration of the phosphate fertilizer export ban, making a significant price drop unlikely given cost support.
